[onewhippedpuppy]

Originally Posted by McLovin

Agreed on that. I've had a Manheim license for years and have bought many cars there over the years.

The prices are not great, and can be easily duplicated (or beat) by shopping private party sales on Craigslist.

For dealerships, shopping Craigslist really isn't feasible, because they need consistent inventory and volume.

Sometimes I'd find a minor bargain, but more often than not (like, 98% of the time) I'd be shocked at how high the cars would get bid up. For popular models and colors, often bid up past what I'd consider retail.

The problem, IMO, is that there's just too many retail car dealers. You have the big franchise dealers that just need stock to fill their lot. They send buyers who just bid basically whatever it takes. They need a lot of cars.

Then you have the small, medium, large and gigantic independent (non-factory franchise) dealers. There are a TON of those. Mostly because it's a fairly low barrier to entry business. Yeah, you need a license, but it's not hard or expensive to get. I got one just as a hobbiest.

It's also a challenge because many of the large or franchise dealerships make their money through financing or service. They can sell a car at or close to cost, knowing that they'll make it up in other ways.

Originally Posted by MRM

I've purchased several vehicles at auction through Eric (Kaisen) of this board. He's local to me. For several years he was willing to work with anyone to purchase a car at auction for a flat fee of $1,000 plus expenses. Purchasing at auction only made sense in certain situations, but under the right conditions you can do well. Purchasing at auction works best when you're looking for 2-3 year old cars that are just coming off lease and you're looking for a higher end car that gets more of a markup. Any European car works well under that scenario but I had him purchase my wife's Mercedes E-350 (at an absolute steal) a Honda Minivan (saved a couple of thousand) and a Ford Explorer (did a little better than bargaining hard at a dealer). We were always on the lookout for the right 911, but I was never in the right position when the right car came along.

In Minnesota and Wisconsin you need a dealer's license to go to an auction, as stated above. There is an amazing process that goes with the auction. They issue a list of cars coming up on each date. They issue a brief condition report and photos that the dealer can view on line, together with a historical average of similar cars being sold. When the auction comes the dealer is either at the auction live or he can bid on line. After the sale there is the option of another inspection at a cost of something like $150 to confirm the condition. If the car fails the inspection you can cancel the sale. If the car passes the inspection you get a short warranty. After the sale you can purchase additional services a la carte, from a complete detail to changing the oil to body work. Once the car is done you have to go to the auction lot to pick it up.

All in all the process was very smooth for how complex it was. If there are a lot of that type of car coming off lease and it's something that has a pretty high dealer markup you can do pretty well. Buying smaller commuter cars doesn't make as much sense.

With some looking there are deals to be had, especially compared to retail. On late model used cars there is also a massive amount of inventory to choose from, much of it good condition. I do very much the same thing for customers, and picked Eric's brain before getting into auctions. I can typically save at least 10% after fees compared to full retail.

Originally Posted by flipper35

There is an dealer auction up the road form us. Judging from the sounds of the cars on test drives it its the last reprieve before going to the crusher. I am not saying all auctions are this way, but these cars are not something that I would buy unless they were priced below scrap value.

Sounds like a "wrong side of the tracks" sort of place. I buy through Manheim, just about every manufacturer sends their off lease cars directly there. So it's easy to find nearly new, low mileage, one owner cars in excellent condition and still under manufacturer warranty. There are also a surprisingly large number of exotics, I've watched Ferraris and Lamborghinis sell for $300k+ through the same auction that runs off-lease Chevy Cobalts.